Here's the key, sweetie.
"In San Diego County, the median home price has soared 129 percent in the past five years, hitting $472,000 in July.
To afford that median home, a household would have to have an annual income of at least $116,000, assuming a 5 percent down payment and 30-year, fixed-rate financing at current interest rates. In a nutshell, the price of houses has increased more than 10 times faster than incomes have risen. An undeniable bubble!
The county's median household income is $52,192, according to estimates from the San Diego Association of Governments. (Median means that half of the county's households make more and half make less.) It has not come close to keeping pace with soaring home prices, increasing only 10.9 percent in the past five years."
Only 18% of San Diego Co. residents can afford the median priced home. You just picked out the weak bubble counter-argument. I'm glad I cashed out of San Diego in 2003, and made out like a bandit! When the interest rates rise, it's going to be carnage for the bubble-doubters. Most of the mortgages in S. Cal. are ARMs. A lot of the owners are speculators who will walk away. In a nutshell, the price of houses has increased more than 10 times faster than incomes. A classic bubble! |
